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The expert believes that natural gas should remain as firm backup while private investment in renewable generation is encouraged in Bolivia.

ISSUE 147 | 2025

Vesna Marinkovic U.

1Reflecting on Bolivia’s energy future once a significant gas producer in the region is the transition toward renewables the best option?

It is the best option if and only if it is carried out under pro-market rules. That means a gradual elimination of subsidies, open competition, bankable PPAs, and an independent system operator. Renewables reduce the long-term cost per kWh, lower fiscal risk, and free up gas for higher-value uses such as petrochemicals, seasonal exports, and backup generation. The “competitive gas” plus “competitive renewables” portfolio maximizes national value, decreases volatility, and attracts private capital.

2In this context, which renewable sources appear to be the most effective, and why?

Solar PV both utility-scale and distributed leads the way, given Bolivia’s high solar irradiation, particularly in the Altiplano, its rapid deployment, modular CAPEX, and low O&M costs. It complements wind generation, which has strong potential in the Chaco, plains, and Andean ridges. Small pumped hydro (PHS) projects could also be competitive in suitable locations, offering firmness and grid synchronization. Biomass/biogas and geothermal would follow in that order.

3 Do you believe an integrated energy transition plan in Bolivia encompassing both conventional and non-conventional hydrocarbons as well as renewables is possible?

An integrated energy transition plan in Bolivia is not only possible but necessary. It should bring together conventional and non-conventional hydrocarbon resources with renewables, articulating an open, competitive “Energy Market 2.0” guided by economic signals. Natural gas should remain the source of firm capacity while private investment is promoted in renewable generation, storage, transmission, and energy efficiency. Non-conventional resources such as shale gas or CBM could be selectively developed under attractive contractual terms and clear market-based rules.

4Within this framework, is green hydrogen a sustainable alternative?

Within this framework, green hydrogen emerges as a sustainable alternative in specific, high-return niches. Its potential lies in regions with abundant low-cost renewable energy and available water, mainly for producing derivatives such as ammonia and methanol, as well as for industrial and heavy transport applications. However, its development should be disciplined, focusing on projects with solid economic fundamentals and avoiding its use in segments where batteries or direct electrification are currently more efficient.

“We must create national conditions for the development of Green Hydrogen ecosystems in Bolivia.”

5Given that hydrogen’s main contributions to the energy matrix include its ability to store and transport energy especially from intermittent renewables its clean combustion that produces water, and its high energy density by weight, would its greatest contribution be in transport, aviation, and heavy industry?

Indeed, green hydrogen’s main contribution lies in hard-to-decarbonize sectors such as heavy transport, aviation, mining, chemicals, steel, and cement. As an energy carrier, it serves as an ideal tool for storing and transporting renewable energy. In Bolivia, its application in logistics corridors, mining operations, and as a substitute for fossil fuels in heavy industries and thermoelectric generation could create a competitive advantage in international markets that value low-carbon products.

6From this perspective, how do you assess the hydrogen market in Bolivia? Is it attractive enough, or does it require special incentives?

investment. Domestic demand remains limited, but the potential for exporting green derivatives to regional and Atlantic markets via the Paraguay–Paraná waterway is enormous. To make it attractive, pro-investment market instruments are needed such as long-term power purchase agreements (PPAs), accelerated depreciation schemes, regulatory stability, temporary tax exemptions, and renewable origin certification mechanisms (CertHiLAC). Without these conditions, country risk will remain a structural barrier.

7Would opting for renewables including hydrogen require as much financial investment as continuing gas exploration?

Opting for renewables, including hydrogen, does not necessarily demand more resources than continuing gas exploration. Gas exploration involves capital-intensive investments, high geological risk, and large outlays with uncertain returns, whereas renewables offer modular, predictable, and bankable investments. While they require spending on grid infrastructure and storage, they generate long-term savings by reducing imports, eliminating subsidies, and stabilizing prices. The rational approach is to gradually reallocate subsidies toward efficient generation, technology-neutral auctions, and infrastructure for storage and transmission.

8One last question: where would the national benefit lie if we were to rely solely on renewables, leaving behind our hydrocarbon tradition?

The national gain from betting on renewables and green hydrogen is multiple and tangible. It translates into cheaper, more stable energy, a stronger trade balance by reducing fuel imports, the creation of skilled jobs in new energy industries, and the possibility of exporting value-added, low-carbon products. Industrial competitiveness, private investment, and macroeconomic stability would all improve significantly. However, the optimal path is not to abandon the hydrocarbon legacy but to combine competitive gas and renewable energies under a free market framework, where economic efficiency and technological innovation shape the course of Bolivia’s energy development.

“Bolivia’s hydrogen market is still incipient and needs clear incentives to attract investment.”